Covid Impact On M&A Activity

We wanted to give you a bit of an understanding and I know Brad gave you an overview at the beginning, but a bit of an understanding of some of the data that we’ve seen for M&A transactions sort of during the COVID period and pre-COVID.

The data that we’ve got here is from Capital IQ, and whilst we know it’s not every record of every single transaction across the period that we’re analyzing, it is a very good source of data and we’re confident that it’s a meaningful use to analyze closed M&A transactions by industry across the time periods. And the time periods are the six month to September 2020 as compared to the six months to September 2019, and we’re calling this code that versus pre-COVID.

So what you’re looking at here is hopefully you should be able to see quite clearly that there’s three industries that have all had increased deal volume during the COVID period, which is resources and mining, information technology and health care and all the other sectors are down. And some quite significantly, as you can see, as might be expected from, say, like a hospitality and leisure.

Typically, what’s happening in these in these sectors is, you know, they’re still business owners that we’re looking to sell their business. But if you’re in an industry where the individual companies have been quite severely impacted by COVID, you know, typically the decision to sell then gets delayed as they realize that if they were to go to market with the with the depressed earnings, they’re likely to achieve a lower unless a lesser amount than it had they just waited until earnings recovered. And so that’s what we’re seeing in a lot of industries. Certainly not health care, which is a good space to be currently.

The other thing I’ll just point out in this slide is it’s not. It’s clearly not every single industry there’s a much longer tail to this data. But given the scale is to be read at the top end, it sort of distorts much below that sort of top 10 industries.